FY15 Guidance Takes Sequester Into Account

May. 30, 2013 - 09:51PM
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WASHINGTON — After years of not preparing for mandated sequestration spending cuts, the Pentagon is now incorporating different levels of budget reductions in its future planning.

US Deputy Defense Secretary Ashton Carter, in a May 29 memo to senior defense officials, told the services to prepare for three different scenarios for fiscal 2015: one that reflects President Barack Obama’s fiscal 2014 budget proposal, a second that is 5 percent less and a third that is 10 percent less.

“[W]e do need to develop options in the event that fiscal realities differ from the funding level in the President’s budget,” Carter said.

The 10 percent cut would reflect the impact of full sequestration, which is roughly a $500 billion reduction over a 10-year period beginning in 2013., while the 5 percent reduction reflects roughly half.

In April, the Pentagon sent Congress a budget proposal for fiscal 2014 that was $52 billion above the sequestration spending cap. At the time, Pentagon officials said the White House had not directed them to plan for sequestration.

Now the services are being asked “to develop options” for reductions to the 2014 budget proposal as well.

The first is a 10 percent across-the-board cut and the second is a 10 percent reduction to DoD’s $527 billion requested top line that allows flexibility to move money around accounts.

Carter also told officials that DoD might have to prepare for a 5 percent budget cut in 2014.

For the past two months, DoD has been conducting the Strategic Choices Management Review (SCMR), which was designed to factor in defensewide budget cuts at three levels — $100 billion, $300 billion and $500 billion — over the next decade. The review has been proceeding on schedule.

The SCMR project is designed to look at ways to modify DoD’s military strategy to accommodate various levels of budget cuts.

As DoD looks to make these types of budget cuts, four Washington think tanks — the Center for Strategic and Budgetary Assessments (CSBA), Center for Strategic and International Studies (CSIS), Center for New American Security (CNAS) and American Enterprise Institute (AEI) — have recommended areas to cut, while looking to maintain DoD’s existing military strategy.

Using a scoring tool developed by CSBA, teams from each think tank made trade-offs among different capabilities to meet spending targets.

To achieve similar budget cut levels described in Carter’s memo, each team called for large-scale personnel cuts to meet spending caps at the half and full sequestration levels.

Under full sequestration, each team made significant cuts to readiness; under half sequestration, all of the teams restored or significantly reduced those cuts.

Each team supported reductions in the military’s air capabilities, specifically calling for broad reductions of non-stealthy fighter and attack aircraft. Aside from AEI, the other three think tanks called for plus-ups of stealthy unmanned aircraft.

Under full sequestration, three of the four think tanks called for reductions to the Air Force’s bomber inventory. But three of four also said that could allow a plus-up for a new stealthy bomber.

All recommended cuts to the Navy’s fleet of carriers, cruisers and destroyers under full sequestration.

CNAS, CSIS and CSBA also called for increasing spending on space and cyber activities. ■